Bank of Uganda (BoU) is yet again in the news for the wrong reasons.
Governor Emmanuel Tumusiime-Mutebile and team of top management from the Central Bank are facing Members of Parliament on the Parliamentary committee [Commissions, Statutory Authorities and State Enterprises] investigating mismanagement and irregularities in the closure of 06 commercial banks.
The ‘rot’ at BoU was unearthed by a confidential special audit report of the Auditor General Muwanga’s Report.
The AG report also queried BoU officials on the flaws in the closure of Teefe Bank (1993), International Credit Bank Ltd (1998), Greenland Bank (1999), The Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and the sale of Crane Bank Ltd (CBL) to dfcu (2016). The report also unearthed unaccounted funds, missing land titles and customer loans that were inherited from closed banks and sold at an undervalued rate.
For example some properties of closed banks were sold at 93 percent discount. –at least this what would be reflected in books of accounts. The process of liquidating assets was handled by a consultancy firm-Welcome to the banana republic.
Why would bank of Uganda which hires the best brains hire external lawyers, consultants to do its internal work?
Governor Emmanuel Mutebile is undoubtedly one of the best Central Bank Governors in Africa. So, where was he as the bank was being messed up? How did it happen under his watch?
Sources close to the Central Bank say, opportunists at BoU could have used Governor Mutebile’s on and off [because of health issues] to do the dirty work.
For example, during the sale of Crane Bank, Mutebile was sickly and was only briefed about the process.
In an interview with Daily Monitor, Mutebile said while he would take responsibility for what went wrong with Crane Bank, he was not criminally culpable. Mutebile also accused the former BoU director of Supervision of hiding critical documents from him regarding the Crane Bank matters
It is also said that, at one time, the Governor questioned the colossal sums of money paid to external consultancy- but the responsible BoU officials defended the fees.
This, knowledgeable sources say is the reason why the Governor’s name is not mentioned anywhere in the mess and irregularities at BoU.
Sources also claim that, one of top officials of the BoU, created a perception that s/he had ‘direct line’ to the center of power.
That everyone [save for the Governor, who has hot line to center of Power] at BoU feared this Ugandan.
That the said person easily influenced other officials who could have done the checks and balance.
It is said, the officials at BoU [with assurance with ‘connected Uganda’] were assured of job security – it said this person, would openly boast how s/he talks to the above at will.
Could this be the reason why the BoU officials who could have done the checks and balance laid back? Easily messed up and mismanaged issues at BoU for so many years?
Crane Bank closure bursts the bubble
It is said that owners of Crane Bank felt their ‘allies’ at Bank of Uganda did not do much to protect them -during and after closure of their Bank.
The Owners of Crane Bank were called all sorts of things including fraudsters after closure of the bank. A bank that BoU praised and awarded accolades.
They had to fight back- by exposing ‘bad boys and girls’ at BoU. That would be done through negative press-it was time for online publications to eat.
There are unconfirmed reports that one of the owners of closed banks paid an official the IGG’s office some five million Uganda shillings to access wealth declaration forms of some BoU officials.
According to this report, the official’s wealth was not matching with his salary. His wealth is said to be over and above that of Governor of Bank of Uganda.
Their reports that some BoU implicated in mess are reportedly transferring their assets to unknown people.
The relatives [wives/spouses] of some BoU staff are also said to be super rich yet some have no jobs. There are unconfirmed reports that one of the relatives of BoU staff received 1.6 billion from one of the suppliers/ Contractors of BoU for no work done.
The Governor reportedly only owns a two properties in Kampala including a house on Mabua road and a farm along Hoima road.
It remains to be seen whether the said BoU’s staff wealth has links to the mess highlighted by Auditor General’s report.
Where is the money?
For example, In the Auditor General’s forensic audit that was also referenced in the petition, auditors discovered that assets worth 23b that were formerly owned by Global Trust Bank were not transferred to dfcu in the purchase and assumption agreements when the bank was closed in July 2014.
The assets included cash balances [6.6b], amounts due from other banking institutions [2.3b], other assets [5.1b], property and equipment [ 5.6b], intangible assets [ 758m] and deferred tax [2.4b].
Auditors failed to trace 9b that was taken from other banking institutions as indicated in the inventory report but was not reflected on the recovery account.
Who is who?
Two BoU staff and two former employees are said to be in panic mode as the investigations into the mismanagement at BoU seem to focus on them.
Others in panic model are owners of a consultancy firm that has worked for the Central for over 20 years. The firm reportedly earns over one billion shillings annually for offering services to the bank of all banks.
What next for BoU officials named in the mess?
Analysts say resigning is not an option for the officials who are implicated. Otherwise if they resign, they may end up in prison.
However, the Governor may choose to sack them. The contract of one of the officials at the centre of mess, expires November next year.
If they choose to stay, his/ their chances of moving to next level of hierarchy at BoU; a have been hampered. With a tainted image, these BoU officials can either remain in the same positions or move to other organizations.
Taken together, it’s a bad ending [ for the BoU staff] for a stellar career built over a longtime.